Money

Deflation – China’s economy’s in big trouble

Published

2 years ago

August 10, 2023

China’s economy faces fresh challenges as it grapples with deflation in its consumer sector while factory-gate prices continue to decline.

The world’s second-largest economy is encountering difficulties in reigniting demand, prompting calls for additional policy measures to stimulate growth.

Concerns are mounting that China might be entering an era of sluggish economic expansion similar to Japan’s “lost decades.” During this period, Japan experienced stagnant consumer prices and wages, a sharp contrast to the rapid inflation observed elsewhere.

China’s initial post-pandemic recovery, which started with a strong first quarter, has lost momentum. Weakened demand both domestically and internationally, coupled with policies aimed at bolstering economic activity, have not yielded the desired results.

CPI down

The National Bureau of Statistics (NBS) reported a 0.3% year-on-year decrease in the consumer price index (CPI) for July, contradicting a Reuters poll that anticipated a 0.4% decline.

This marks the first drop since February 2021. Concurrently, the producer price index (PPI) has declined for ten consecutive months, registering a steeper-than-expected 4.4% fall.

This deflationary trend has led to apprehension among consumers and businesses, who are choosing to hoard cash instead of spending or investing, despite lower interest rates.

China’s consumer price index fall is the first negative reading since Japan’s in August 2021, raising concerns about its impact on major trading partners.

Gary Ng, Asia Pacific senior economist at Natixis, noted, “For China, the divergence between manufacturing and services is increasingly apparent, meaning the economy will grow at two speeds in the rest of 2023, especially as the problem in real estate re-emerges. It also shows China’s slower-than-expected economic rebound is not strong enough to offset the weaker global demand and lift commodity prices.”

Real estate crisis

These figures follow a recent report indicating a decline in exports and imports for July.

The real estate sector, a cornerstone of China’s economy, is also grappling with mounting debt issues. This economic environment has prompted consumers and businesses to be cautious with their spending and investment, even as interest rates remain low.

These developments have implications beyond China’s borders, raising concerns about the impact on its major trading partners and the global economy. While many major economies are grappling with inflationary pressures, China’s current deflationary situation sets it apart.

Despite these challenges, Chinese officials have downplayed the risk of prolonged deflation. Liu Guoqiang, deputy governor of the central bank, emphasized that deflationary risks are not expected in the latter half of the year, while acknowledging that the economy requires time to normalize post-pandemic.

China’s CPI decline in July was mainly driven by a steep 26% drop in pork prices, owing to a combination of weak consumption and ample supplies. However, on a month-on-month basis, the CPI actually increased by 0.2%, defying expectations for a decrease, fueled by a surge in holiday travel.

Money

How to position investments for 2026: Expert advice on market cycles

As 2026 begins, strategic investment positioning and understanding market cycles are crucial for navigating today’s evolving financial landscape.

Published

19 hours ago

January 14, 2026

Harvey Vargas

As 2026 begins, strategic investment positioning and understanding market cycles are crucial for navigating today’s evolving financial landscape.

As 2026 begins, investors are navigating an evolving market landscape. Experts stress that positioning your investments strategically is far more important than trying to predict market movements.

Key factors include focusing on quality companies, maintaining strong cash flow, and diversifying intelligently.

Dale Gillham from Wealth Within Group joins us to break down what defines a major market cycle and why understanding it can shape your investment approach. From identifying inflation-resilient businesses to selectively tapping into growth themes like AI, this discussion covers essential strategies for the year ahead.

We also explore the role of risk management, the importance of an exit strategy, and how emotional decision-making can impact your portfolio. For anyone looking to strengthen their investing education and skills, this episode offers actionable insights to gain an edge in 2026.

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#Investing2026 #MarketCycles #WealthManagement #AIInvesting #FinancialStrategy #RiskManagement #InvestmentTips #TickerNews

Money

Markets in 2026: Fed rates, gold surge, oil tensions & AUD strength

As 2026 begins, markets face economic shifts; gold and silver soar, while energy and currencies impact global investors.

Published

2 days ago

January 13, 2026

Harvey Vargas

As 2026 begins, markets face economic shifts; gold and silver soar, while energy and currencies impact global investors.

As 2026 begins, global markets face a mix of economic shifts and geopolitical tensions shaping currencies, commodities, and interest rates. The Federal Reserve’s next moves are under the microscope, and Zoran Kresovic from Blueberry Markets says understanding these changes is key for investors navigating the year ahead.

Gold and silver are hitting all-time highs, driven by market volatility and economic uncertainty. Kresovic notes that both metals are likely to continue climbing, remaining essential safe-haven assets amid inflation concerns.

Energy markets are also volatile, with crude oil prices rising amid geopolitical tensions. Meanwhile, the Australian dollar is showing strength against the U.S. dollar. Kresovic highlights that these trends in energy and currency markets can ripple across the global economy, making them critical for investors to watch.

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#MarketUpdate #FedRates2026 #GoldPrices #SilverSurge #CrudeOil #AUDUSD #InvestingInsights #TickerNews

Money

Stocks hit record high as Powell faces investigation and Trump proposes credit cap

S&P 500 hits all-time high amid Fed scrutiny; Trump’s credit card cap proposal raises investor concerns over bank profits.

Published

2 days ago

January 13, 2026

Harvey Vargas

S&P 500 hits all-time high amid Fed scrutiny; Trump’s credit card cap proposal raises investor concerns over bank profits.

The S&P 500 reached a new all-time high, with the Nasdaq climbing 0.5% while the Dow Jones held steady. This comes amid news of a criminal investigation into Federal Reserve Chair Jerome Powell. Despite the scrutiny, analysts believe short-term interest rates and inflation are unlikely to be impacted.

Meanwhile, Trump’s proposal to cap credit card rates at 10% for a year sparked concern among investors about potential effects on lending and bank profitability. Major bank stocks reacted sharply, with Citigroup down 3% and Capital One falling 6%.

In commodities, gold futures rose 2%, reflecting fears that political pressure on the Fed could challenge its ability to manage inflation effectively.

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#StockMarket #SP500 #Nasdaq #FederalReserve #JeromePowell #TrumpNews #BankStocks #GoldFutures